Canada’s economic policy uncertainty index has climbed back to levels not seen since the COVID-19 pandemic, a sign that a more volatile period may be taking hold. Income inequality hit a record high last year, and youth unemployment reached 14.6 per cent in September 2025, its highest point since 2010, excluding the pandemic.

Most Canadians have had relatively little experience with major economic downturns. Since the early 1990s, Canada has largely been spared the boom-and-bust cycles common in the United States. The country avoided the worst of the 2008 global financial crisis, and until COVID-19, had not experienced a major economic shock in a generation.

In that long stretch of time, Canadians have grown accustomed to relative stability, which makes the current moment feel especially disorienting. We are, as the saying goes, living in “interesting times,” and that is rarely good news for prices, employment prospects, government budgets, business investment or productivity.

Many Canadian households are carrying a fair amount of debt while facing inflation and rapid changes in job markets. What is a typical Canadian household to do? As an economist, I have some practical advice to offer.

Why uncertainty is rising

This ongoing economic angst has several overlapping sources that are both global and domestic in nature.

Geopolitical conflicts, including the ongoing war involving the United States, Israel and Iran, are increasing the costs of everyday items like food and gas. These disruptions ripple through global supply chains, feeding into higher input costs for Canadian businesses and, ultimately, higher prices for consumers.

At the same time, tariff disputes led by the U.S. are causing........

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